New hotels and developments bode well for Ras Al Khaimah's expanding tourism sector

In recent years, the tourism sector in Ras Al Khaimah has been enjoying a period of growth and profitability. In March 2015, a year after three new hotels opened, adding more than 1450 keys to the emirate’s hospitality sector, RAK’s Tourism Development Authority (RAK TDA) was able to report average occupancy levels of 70.31%, above the previous year’s average of 62.41%. The northern-most emirate also has ambitious plans to continue the growth of its tourism sector. The development pipeline includes expansion and refurbishment of existing properties, the completion of the Al Marjan Island projects, a new ecologically-themed hotel at Mina Al Arab and a new Marriott hotel.


RAK TDA was created in 2011 and tasked with the role of regulating and promoting the emirate’s hospitality sector. As part of its remit, RAK TDA collates and publishes data on hotels, working alongside the RAK Department of Economic Development (RAK DED) to assess the impact of tourism on GDP. According to the most recent figures in RAK DED’s “2014 Statistical Yearbook”, the restaurants and hotel sector was valued at Dh728.4m ($198.3m) in 2013, accounting for around 2.8% of RAK’s GDP. This is up from 2009, when the numbers were Dh332m ($90.37m) and 2% of GDP.


Industry figures also show significant growth and increasing income across key hotel performance indicators. Revenue per available room (RevPAR) went from Dh243.5 ($66.28) in 2011 to Dh419.81 ($114.27) in 2014, which represents growth of 72% over five years, according to a 2014 report by STR Global. Over the same period, the average room rate rose by 67%, from Dh389.81 ($106.11) in 2011 to Dh651.39 ($177.31) in 2014. Rooms sold increased by 98% from 2010 to 2014, from 521,041 to just over 1m, according to RAK TDA. The average percentage occupancy has fluctuated during the five-year period, but has remained in the mid- to high sixties. It was 69.12% in 2011 and reached a peak of 69.28% in 2012 before dipping slightly to 64.4% in 2014, the year in which three new hotels opened for business. Figures for the first quarter of 2015 show that the occupancy rate climbed from 53.85% in January to 61.66% in February and 70.31% in March 2015. These RAK TDA figures showed that in the first quarter of 2015, RAK’s three-, four- and five-star hotels had a total of 417,598 rooms available with 629,728 beds. Guest nights grew from 166,204 in January to 189,475 in February and 219,038 in March 2015.

However, Hilton Worldwide’s country manager for RAK, Mohab Ghali, said investors should take other factors into account beyond occupancy rates because the sector has grown rapidly. “I would say that 2014 was not a fair or representative year, because we went from 2000 rooms in 2013 to 5000 rooms in 2014,” Ghali told OBG. “During this period we ran at almost the same occupancy level. In general, it would take two to three years to increase to this level of occupancy with a new injection of capacity such as we have witnessed here.”

Record-Breaking Year

In February 2015 RAK TDA reported tourism revenue in 2014 had surpassed the Dh1bn ($272.2m) mark and that the number of guest nights had grown by 72% compared to the previous year to 2.14m, suggesting a total of 1.24m in 2013. Its detailed records of 19 hotels, classified as three-star and above, showed total revenues of Dh906m ($246.6m), with food and beverage accounting for Dh309.5m ($84.2m), room revenues of Dh538m ($146.4m) and other income of Dh59m ($16.1m).

Tourism & UAE GDP

Federal UAE statistics show tourism’s direct contribution to the economy in 2014 was Dh61.6bn ($16.77bn), or 4.1% of total GDP, with a forecast rise of 4.9% in 2015. The contribution to GDP, including direct and indirect spending, was Dh126.7bn ($34.5bn), or 8.4% of GDP, in 2014, expected to rise by 4.9% in 2015.

Economic Impact

According to the World Travel & Tourism Council (WTTC), the industry supported 307,000 jobs across the UAE, or 5.4% of total employment in 2014, and it predicts this will rise by 5.4% in 2015 and by 2.6% per annum to 420,000 jobs by 2025. WTTC’s 2015 “Economic Impact” report for the country also noted that in 2014 visitor exports generated Dh86.3bn ($23.5bn), or 5.7% of total exports, and it forecast growth of 1.4% in visitor exports in 2015. The report suggested Dh23bn ($6.26bn), or 6.5% of all investment in the UAE in 2014, was in the tourism sector. WTTC predicts 13.5% growth in tourism investment in 2015.


A number of UAE-owned hotel chains and international brands have invested in RAK in recent years. The preferred model in many cases is for international brands to operate hotels built and owned by Emirati or GCC-based investors. The French brand Golden Tulip operates the fourstar, 130-key Khatt Springs Resort near Khatt Hot Springs, and in October 2014 it signed an agreement with GCC-based Action Hotels to run a refurbished Hotel Ras Al Khaimah as Tulip Inn Ras Al Khaimah. The three-star, 104-bedroom property in the centre of RAK is due to open in September 2015. In April 2010 Asian Group - Banyan Tree Holdings, which specialises in environmentally conscious premium hotels and resorts, launched a luxury resort in RAK. Banyan Tree Al Wadi offers 101 villas with pools within a private nature reserve, while a second property, the Banyan Tree RAK Beach in Al Hamra, has 32 beachfront pool villas. The US brand Ramada Suites runs a 38-key property close to the beach north of RAK City.

Emirati Chains

Abu Dhabi-based Rotana operates the 354-key Cove Rotana resort, a collection of five-star villas around an inlet and with a 600-metre private beach, which is located 30 minutes south of the city centre and adjacent to the Mina Al Arab residential development. Rotana hopes to see its international hotel chain grow to 100 properties by 2020. Another UAE-based hotel operator, Bin Majid, operates four properties in RAK. These include the 136-key Bin Majid Beach Hotel close to Cove Rotana; the Bin Majid Beach Resort, which comprises 173 chalets adjacent to Al Marjan Island; the 186-key Mangrove Hotel in RAK City; and the 373-key Acacia Hotel, which is conveniently located for businesses in the RAK Investment Authority (RAKIA) arena. The company also owns Bin Majid Tower, which consists of 230 apartments.

Dominant Brand

Hilton Worldwide is perhaps the most established international brand in RAK. “We opened here 12 years ago with 277 rooms at the Hilton RAK and have now grown to 2300 keys. Throughout that time, our occupancy levels remained at 75% to 80%,” Ghali told OBG. “When we first started in RAK, very few international hotel chains were interested. We saw the opportunities and, with the successful marketing of the destination over the years, have been rewarded by the various owners who have been very supportive to us. It has been a win-win situation.”

The geographical spread of Hilton-managed hotels also reflects the changing face of the destination. The RAK Hilton is in the centre of the city and enjoys a waterfront location. In 2015 it was closed for refurbishment, which is due to take a year, and will re-open in 2016 as a 240-room Hilton Garden Inn with full bar, restaurant, business and gym facilities catering to an upscale corporate clientele. The hotel stands beside the Al Naeem Mall, which opened in 2015. A DoubleTree by Hilton with 154 rooms is situated across the road from the Hilton Garden Inn, giving a combined key count of almost 400 in a central location, which could cater to mid-sized corporate events and meetings. Both properties are close to RAK Exhibition Centre, a 37,400-sq-metre venue that has been used for fairs, festivals, exhibitions and conventions. Five minutes’ drive away from the city centre, the Ras Al Khaimah Resort and Spa was Hilton’s second property in the emirate when it opened in 2006, with a subsequent expansion in 2009. It boasts a 1.5-km sandy beach, six swimming pools, children’s facilities, 13 food and beverage outlets, and 475 keys. In recent years Hilton’s newest properties have been developed further south in the emirate at Al Hamra, and most recently on Al Marjan Island.

Al Marjan

Consisting of four reclaimed areas of land, Al Marjan Island has been developed to provide a new seafront location for villas, apartments and hotels. In early 2014 three hotels opened: Al Marjan Island Resort and Spa, Rixos Bab Al Bahr, and a DoubleTree by Hilton Resort and Spa. The three properties opened with 301, 650 and 484 keys, respectively. A fourth hotel, Bin Majid Hotels’ Santorini, is due to open in 2015. Al Marjan Island Resort and Spa, which is owned and operated by Emirati companies, does not serve alcohol, while Bab Al Bahr is an “ultra-all-inclusive” resort and operated by Turkish firm Rixos. Further developments are planned for Al Marjan (see analysis).

Al Hamra

While Al Marjan may be the newest part of the emirate, a few hundred metres across the water sit the hotels, villas and amenities of Al Hamra that provide dining, golf, shopping and beach activities. Hilton Worldwide runs all the hotels in Al Hamra, either under its own brands or in an advisory capacity – except for the Banyan Tree RAK Beach, a 32-villa resort. Hilton Al Hamra Beach and Golf Resort is currently a 265-key property, and Hilton advises in the management of Al Hamra Residence and Village, which has 367 keys.

Aiming For The High End

However, the emirate’s most high-profile high-end property is the Waldorf Astoria, which opened in 2013. “The opening of the Waldorf Astoria in August 2013 changed the whole hotel landscape in RAK because it set the mark for everybody to compete against,” Roger Tannous, general manager of Al Marjan Resort and Spa, told OBG. “Prior, hotels were more scattered.” The luxury hotel blends features found in Waldorf Astoria properties around the world with local influences. The Peacock Alley promenade in its entrance hall recreates the ambience of the original New York hotel, while its grand six-metre-high lobby clock, handmade by Smith of Derby in the UK, has been created with five rotating prayer rings, which display the prayer times each day.

The hotel also features a number of restaurants serving both local and international cuisine, with noted chefs such as Lebanon’s Joe Barza serving as culinary consultants. “Opening a luxury property with 346 keys in RAK is not easy,” Ghali told OBG. “We have done well because of the grandeur of the property and the brand name.”


RAK’s popularity as a destination for locals is also apparent when the nationality of its tourists is considered. RAK TDA figures published by RAK DED show 40% of guests staying in the emirate in 2014 were UAE residents. According to Christopher Hewett, associate director of UK-based firm TRI Consulting, RAK has long appealed to people living in the UAE. “People enjoy coming to RAK on family breaks and holidays,” Hewett told OBG. “It is a relaxing place close to Dubai, but more affordable.” However, he said the destination has also worked hard to reach out to new markets. “RAK is becoming one of the strongest performers in the UAE, because it has developed from a small internal destination to one that has become much more international in its appeal,” Hewett said. “Much of this is owed to RAK TDA, which has emphasised international markets much more in recent years, leading to more tourism. When you compare RAK to other areas of the UAE, it has grown faster than other emirates such as Fujairah.”

International Destination

RAK TDA data show that the four largest source markets in 2014 accounted for 72% of overnight stays, with 26% coming from the UAE, 22% from Germany, 19% from Russia and 6% from the UK. The rouble crisis in 2014 had an impact on the hotel sector, which had come to rely on the Russian market. “We were affected significantly by the lack of Russian tourists,” Tannous told OBG. Indeed, Russian charter airlines stopped most direct services to RAK International Airport, according to the airport’s CEO, Mohammed Qazi. “The Ukraine war and the troubles with the Russian currency have affected the whole of the region and even bigger players such as Dubai’s international airport in terms of charter flights to this area,” Qazi told OBG. Monthly figures released by Dubai International Airport showed year-on-year falls in passenger numbers from Russia and neighbouring countries in January (22.7%), February (35.6%) and March (31.7%) in 2015.

Such trends are prompting efforts to diversify source markets in the tourism industry. “At Hilton we avoid relying on any one specific or a small number of markets, and so the impact of the fall in the Russian market was more minimal for us compared to other chains that catered more to this subsec-tor,” Ghali told OBG. He explained that Hilton’s European target markets include Scandinavia, Germany, Eastern Europe, Italy and France, while the DoubleTree at Al Marjan Island has made a point of targeting China, and the Hilton Resort and Waldorf Astoria cater to large Indian wedding parties.

Expansion Pipeline

The refurbishment and rebranding of the RAK Hilton as a Hilton Garden Inn, adjacent to the DoubleTree by Hilton, will give Hilton a corporate destination with 400 keys in RAK City. However, its main target for expansion is in Al Hamra and at the adjacent DoubleTree by Hilton Resort and Spa at Al Marjan. The latter is to add 250 villas, while the Hilton Beach and Golf Resort, which currently has 265 keys, is to add another 670 for a total of 935. This means Hilton, with its partners at Al Hamra Residence and Village, will have 2000 keys across the Al Hamra and Al Marjan areas. To make this collective offering more appealing to the meetings, incentives, conferences and exhibitions (MICE) segment, there are also plans to expand and upgrade the Al Hamra Conference Centre. “What we are planning to do is demolish the existing convention centre and build a state-of-the-art convention centre with a capacity of 3000, which can be supported by the Waldorf and the Hilton properties around the area,” Ghali told OBG. “This is one of the reasons we are expanding our key count here in Al Hamra.”

Orascom Developments announced an extension to Cove Rotana with an additional 150 rooms, and RAK Properties said it has plans for a new hotel at Mina Al Arab. In May 2015 a new deal was announced with Marriott International, which will build a 300-key, five-star beach resort to the north of RAK in the Maaridh area, due to open in 2019.


RAK describes itself as the rising emirate and a centre of affordable luxury. These claims are borne out by 2015 forecasts by international property management firm Colliers International, which predicts that RAK can expect a growth in RevPAR of 5%. Along with Dubai Creek and Festival City, this is the highest level of anticipated growth in the UAE, according to Colliers. Its forecast for RevPAR in RAK is $118, which is higher than Sharjah ($68), Fujairah ($87) and Abu Dhabi City ($103), but still far below any of Dubai’s districts, which ranged from $174 in Sheikh Zayed Road to $396 in Palm Jumeirah. The same report anticipates occupancy levels of 63% in RAK in 2015, below Fujairah (65%), Abu Dhabi City (76%) and Palm Jumeirah in Dubai (82%), which suggests room for growth. The average daily rate in RAK was forecast at $188, compared to $232 at Abu Dhabi Beach and $484 at Dubai’s Palm Jumeirah.


With expansion and affordability in mind, hoteliers and developers active in RAK are looking to take advantage of the emirate’s growing attraction and meet the rising demand for accommodation. Among the most promising projects are those that look to leverage industry growth in RAK with accommodation needs, with a particular focus on the luxury travel and MICE segments. Established hotel chains are building on past success to meet demand, indicating a positive outlook and high expectations for the tourism sector’s future.

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